Mortgage Lenders And Adverse Credit

When it comes to adverse credit, mortgage lenders fall into two camps. There are those who won't lend to someone with poor credit, and those who are specially designed to lend to people with a bad credit history.

Most of the high street lenders fall into the first category. Their ideal mortgage applicant is someone who has a steady job, a good income, and who has never had any credit problems. That makes that person a low risk applicant, who will be able to pick from the widest range of deals. With more than 8,000 different mortgage deals on the market, that's a lot to choose from.

Bad Credit Does Not make You A Bad person
But what about the rest of us, who aren't typical mortgage applicants? Bad credit doesn't make you a bad person, just unlucky. You may have adverse credit for losing your job because your employer has gone out of business, because you have had a critical illness, or because your partner has left you. These life changing circumstances can adversely affect your financial health.

Luckily, there's a growing pool of lenders who cater specifically for these circumstances. They are specialist mortgage lenders, who lend mortgages for non-standard cases, including "buy to let" and "right to buy" mortgages. Some of the lenders are subsidiaries of high street mortgage lenders, such as Nationwide's UCB Home Loans. Others deal only with this kind of business, such as GMAC-RFC.

Higher Risk To Mortgage Lenders
There's no denying that granting a mortgage to someone with a poor credit history represents a higher risk for mortgage lenders. This is why they charge a premium for this service. With some mortgage deals, that premium will come in the form of a high application or completion fee, which may be set at a percentage of the mortgage loan. With others, you may need to find a higher deposit to qualify for the mortgage, though there are also plenty of adverse credit mortgage lenders who will provide mortgages at 95 per cent loan to value or more.

With all adverse credit mortgage lenders, the interest you pay will be higher than if you had an excellent credit rating. Each adverse credit circumstance raises the rate a little bit higher. This may seem a small price to pay to get the mortgage you want. Adverse credit mortgage lenders provide the full range of mortgages that you would get from a mainstream mortgage lender.

Use A broker To Compare Products
There are several ways to find an adverse credit mortgage lender to provide your mortgage. Most lenders have product details available on their websites, and this can be a good starting point. If you want to compare products, a broker or a financial comparison site is a useful option. The more information you provide, the more likely it is that the deal you find will really be right for you.